Inherited Wealth—A Detailed Account

If you will or recently have come into some money due to an inheritance, it might be time to start planning the right way of managing this large amount of money so your descendants can benefit from it in the future as well.

Taking Care of Your Inherited Wealth in the UK

While it might be just fine to leave your money in the bank as is, keep in mind that you will need to protect your wealth from being taken over by something known as the Inheritance Tax.

Intended by the HM Revenue & Customs for just the seriously wealthy, the Inheritance Tax has since become the bane of many middle-income families who have substantial wealth, but not enough assets or cash to pay for it.

This is why it’s important that you know the right ways of cutting into the IHT so this inheritance doesn’t become a thorn in your side.

What to Do

– Make it a Gift

If you’re married or have a partner, designating this inheritance as a gift for them would take the amount away from the jurisdiction of the Inheritance tax. However, the process for this is complicated so you’ll need the help of solicitor with the right experience to make it smooth.

– Put it in a Trust

If you don’t have a partner, spouse or children under the age of 18, setting up this money as a trust for them will shift the money from under the Inheritance Tax to the Capital Gains Tax. Keep in mind, each trust has its own laws and regimes so you will need to talk to a solicitor about any further details.

– Leave Some to Charity

This will cut down on Inheritance Tax by a bit but you’ll need to give away just enough so the total sum does not exceed the nil-rate band of £325,000. It won’t be a huge saving but it will help.

Conclusion

Need help with your inherited wealth? Contact Wembley Solicitors in Middlesex, UK. As a leading firm in the UK, we can help you understand the dynamics of your inherited wealth and all connected laws. Contact us at 020 3417 3700.